Our view: Big, fat new taxes may make single-payer switch frightening
Published 5:00 pm Wednesday, May 25, 2022
Nothing may scare Oregonians away faster from the state moving to a single-payer health plan than big, fat new taxes.
And the state’s Task Force on Universal Health Care is talking about … big, fat new taxes.
Just how big and fat? Billions.
A new state income tax. A new payroll tax on businesses. And maybe even a new state sales tax.
The Legislature set up the task force to design a single-payer health care system. The government would create and run a system with promises of providing better care, coverage for all Oregonians and lower cost. Single payer means all the variety of benefits, policies and networks would go away and be replaced by government. Instead of paying health premiums or having an employer pay for coverage, taxes would be paid to the government.
People and employers are frustrated with rising health care costs. The new taxes may be less than what Oregonians effectively pay now. But there are no guarantees that single payer will be the cure everyone wanted. As imperfect as the health care system is, it is the devil Oregonians know. It is not some new devil with new taxes and change.
The state task force has a deadline of September to finalize its proposal. Then Oregonians will have something firmer they can covet or reject. The task force is scheduled to meet Thursday to get more into the numbers. Some big decisions might be made this week.
The task force needs to pick an assumption for how much will the system cost to run. The difference is in the billions. And the decision can lower or raise the proposed new taxes. A state consultant backed spending 6% on state administrative costs, so about $3.5 billion in 2026 dollars. Some task force members believe the state can do it for less, perhaps 4%. But that 4% assumption is called “aspirational” in task force documents and is not supported by the state’s actuarial analysis.
How should the new income tax on households work? Should there be a cap on the household contribution roughly in line with what the premium might be? Or should it be with no cap, so household contributions increase with income? With a cap, nobody would pay more than the projected cost of their coverage. Without a cap, it would work like a progressive tax and some households may pay several multiples of their projected coverage cost.
The task force needs to lay this out clearly for Oregonians. There is a good draft FAQ that answers many questions. There are many it doesn’t, yet. Oregonians will need to know what they would pay in a new income tax. Oregonians will need to know what employers would be paying in a new payroll tax. And, is a new sales tax coming, too?
Give us the numbers. Justify them. Picking aspirational goals not supported by actuarial analysis may not help. Only with justified numbers can Oregonians decide it is good to essentially destroy private-sector health insurance jobs and increase government control for promises of better, cheaper care. Only then can Oregonians decide if they should leap from the devil they know and toward another who comes making promises.
You can tell the task force your thoughts by emailing jtfuhc.exhibits@oregonlegislature.gov.